Thursday, August 31, 2006

Most home buyers need a mortgage to buy a home. Before a mortgage is approved, the lender or mortgage broker usually hires an appraiser to verify the market value of the property. Ideally, the appraised value matches the price the buyer has agreed to pay.

When a property appraises for less than the purchase price, the transaction can be in jeopardy. However, a low appraisal won't necessarily stand in the way of the lender granting the loan if the borrowers are making a large cash down payment.

For example, let's say you agree to pay $1 million for a property, and you have $300,000 for a down payment. The appraiser puts a $950,000 value on the property, which is less than you've agreed to pay. You're a well-qualified buyer, so the lender is willing to give you a loan for 80 percent of the appraised value, or $760,000.

With a $300,000 cash down payment, you only need a $700,000 mortgage. So, the sale can proceed unless you have a problem buying a property that appraised for less than you agreed to pay.

Wednesday, August 30, 2006

AMONG Westchester properties that have recently been forced into foreclosure are a $1 million house in Harrison, one costing $1.5 million in Scarsdale, a 1,850-dwelling condominium project in Yonkers that is $28 million in arrears, and a $75,000 house in Yonkers.

What they represent is the wide range of properties in the county that are in trouble, said Roger Sirlin, a lawyer in Mamaroneck who specializes in real estate.

Falling real estate prices, a faltering economy and loss of jobs have all contributed to the foreclosures, which number more than at any time in recent memory, Mr. Sirlin said.

Sunday, August 27, 2006

"The true value of the property will be discovered by the buying public"

This is not your tipical way to sell your house. In the new book by Bill Effros, "How to Sell your Home in 5 Days" outlines an auction-type method that users call a "round-robin" bidding process.

"In traditional real estate transactions, we start artificially high and work down," says George Cappony, a 5-day sale coach who runs the Web site www.5-daysale.com. "Here we start artificially low and let the market tell us what the house is worth." "It works just like on eBay. If I don't reach that [reserve], I don't sell the property."

The biggest financial advantage is that the method enables the seller to save on broker commissions and fees. And if the final sale price does not bring what the seller originally thought the house would bring, that may be due more to unrealistic expectations than a faulty method

Friday, August 25, 2006

Mortgages are stuck in a happy place, near 6.5 percent for the low-fee deals, the 10-year T-note's decline to 4.79 percent not enough to move the mortgage market.

At the moment, this whole six-week decline in rates rests on the assumption that the housing market is in a progressive collapse that will soon take the whole economy with it. The bond-betting housing bubblers have one big risk: the only bubble may be in the froth on their own Kool-Aid. Housing is slowing, steadily and a lot (sales of existing homes down another 4.1 percent in July, unsold inventories to a 7.3-month supply, last seen in 1993), but slowing in the real economy is undetectable.

July orders for durable goods rose a modest .5 percent, but on the heels of a big upward revision to June -- so strong that second-quarter GDP growth may be revised from mid-2 percent to 3 percent. The leading indicator for employment is new claims for unemployment insurance, and there is not the slightest upward flicker.

Yes, we're 17 Fed rate hikes deep, but from an emergency low, and now at a rate level at which the economy thrived in the 1990s. The big growth engine is global trade, growing so fast and in so many new ways (electrons!) that economic models and measurement can't keep up, let alone predict.